June 15: According to a report from Kotaku, Xbox will be shutting down Compulsion Games. An official announcement has not been made, but that could be changing very soon.

Compulsion Games previously made South of Midnight, which came to Nintendo Switch 2 a little while back. The studio was also behind We Happy Few.

Kotaku believes that more than 90 people will be affected by Compulsion Games’ closure. The company just put up job listings two months ago for a “fascinating, intriguing, brand new IP.”

Xbox has been a state of disarray as of late. A few days ago, a letter was posted in which it brought up that it’s ending the fiscal year “at about a 3% accountability margin, down year-over-year.” Outside of Activision Blizzard King, Microsoft has “spent over $20 billion on ongoing investments in our content, platform, and hardware subsidy, but our annual revenue has declined nearly half a billion during that time.” Xbox said that “this cannot continue.”

Compulsion Games now seems to be the first casualty here. Asha Sharma, the current CEO of Xbox who replaced Phil Spencer following his retirement, has been making various changes since she took over.

South of Midnight is available on Nintendo Switch 2 right now and you can learn more about it here.

July 6: Microsoft announced a series of moves for its gaming division today, which includes a number of studios going independent. Compulsion Games is one of them – the others are Double Fine, Undead Labs, and Ninja Theory.